Another Look At Cancellation Policies
I recently read an article published to FTAProtect.com by my friend Steve Moses. Steve brought up the important topic of cancellation policies for students enrolling in firearm training courses. I have some additional insights to add along with a completely different approach to the topic.
The vast majority of firearm trainers I interact with have a no cancellation policy in which students may be able to reschedule for a future class but under no circumstances can apply for a refund. All of my experience and data suggest this approach is generally speaking a mistake.
I understand the sentiment of the firearm trainer. Often teaching a class comes with some hard costs such as a venue fee or other materials, and teaching a small group of only one or two students might mean losing money or breaking even. In a small class, one or two students not showing up or requesting refunds the day of the class may be the difference between being profitable or losing money.
On the opposite side of the spectrum if you generally sell out your class seats, and in our current political climate that is often the case for many, then a student requesting a refund or not showing up to the class means a loss in revenue due to losing the opportunity to sell that seat to a different student who was unable to sign up because the class was full.
I get it. I care about the revenue side of this business. My time is as valuable as most and as well-intentioned as we all are we can not subsist and serve the American gun-owning community if we can’t put food on the table.
That said, we need to remove the emotion from the situation and look at this more objectively. As the President of ConcealedCarry.com over the last decade we have listed over 1,000 firearm training classes on our website and managed the enrollment of over 10,000 students. As aggressive data-driven marketers we look at the data closely to ensure we maximize our efforts and best serve the customers.
Since the inception of our training business we’ve had the policy of a no questions asked 100% refund guarantee. If the customer is unable to attend for any reason they can request a full refund before or after the class. This seems counter-intuitive. After all, this must lead to us occasionally losing money on those smaller borderline classes or having a missed opportunity cost in a sold-out class right? Yes, that certainly does happen.
That said the policy still stands and there are a number of reasons we hold true to that policy. Here are those reasons:
1: Some states have consumer protection laws that require businesses to allow a customer to request a refund within a certain number of days or hours of making the purchase or alternatively post the return/refund policy in a specific way, often even dictating the size of the font. Complying with these various state guidelines would be a pain in some cases and since we operate across the country in more than half of the states we prefer to have a policy that we know will not conflict with any state laws. By offering a no questions asked refund policy we don’t have to worry about compliance. Have you checked your state laws?
2: Credit card merchant providers often have policies relating to when and how you will refund customers. Even if your current policy complies with the merchant provider there is also the issue of mitigating the risk of chargebacks. A few customers choosing to dispute your charge to their credit card can cause damage to your merchant reputation and over time can cause the merchant provider to cancel your account, force your funds through an escrow account, or charge you fees. By offering a no questions asked refund policy we don’t have to do battle with any merchant providers and we greatly reduce the likelihood that a customer would have cause to dispute a charge.
3: Our brand is our most valuable asset and at some point, we have to ask ourselves if we are treating people the way we would want to be treated if the roles were reversed.
4: Lastly, but frankly most objectively, our data suggests you will make MORE money when you offer a 100% refund guarantee. Many years ago we decided to start including our refund guarantee as a selling benefit on our event/product sign up pages. The policy was always there but buried deep on the website where most customers wouldn’t look to find it. So we decided to highlight it with a large “Guarantee” style badge and image that clearly communicates to potential students that their enrollment and fee is safe. We actively chose to point out that if they had any reason to want their money back all they had to do was ask. What do you think happened?
Did the number of refunds go up? Yep, sure did and yet we still made more money because there was one other critical consequence of so boldly posting our refund guarantee. Higher conversion rate.
The conversion rate is the % of people who look at a product/class enrollment page and choose to enroll. When we started posting our refund guarantee that % increased by approximately 15%. That is huge. More students felt comfortable enrolling because they knew that if something happened they could always get their money back.
If there was an airline that had a refund guarantee on plane seats wouldn’t you be about twice as likely to fly that airline than any other airline where such a guarantee is an added and expensive add-on?
The increased number of enrollments received more than offset the slight increase in refunds and the occasional pain caused when a class is borderline too small to teach or sold out.
We have a competitor in the industry, whose name I do not have permission to share, who has students only enroll online with the promise to pay in person at the class. This, of course, leads to a much higher number of no-shows but according to this company they claim the significant increase in enrollments offsets the no-shows in a way that justifies the method.
Before you set your cancellation policy consider if it will not only affect what happens POST purchase but can also have a positive or negative effect on the decision to enroll in the class to begin with.
Jacob S. Paulsen is the President of ConcealedCarry.com. ConcealedCarry.com provides in-person and online firearm training for American gun owners. The Company is currently teaching in-person classes in 25+ states with a team of more than 55 instructors. Jacob is a NRA certified instructor & Range Safety Officer, Utah BCI instructor, Affiliate instructor for Next Level Training, Graduate and certified instructor for The Law of Self Defense, and a Glock and Sig Sauer Certified Armorer.